Martha Stewart

I'm really getting tired of hearing about Martha Stewart on the news. Yes, she was found guilty on all charges. Until the sentencing phase is complete, I don't need to hear anymore about this case. It doesn't effect me at all. She's just a regular person who made a bad decision. Happens all the time. Some folks are trying to make this into a lot more than it really is though. You can't hear a report on the case without someone bringing up the fact that she's a woman, and that it is because she is a woman that the courts are going after her. Please. The courts are going after her because she broke the law. That is what they are supposed to do. Last night I heard a representative from a women's rights group claim that no one else in the industry is being prosecuted for illegal financial transactions, and it was because Martha is a woman that she is being targets. Good grief, has she never heard of Enron, MCI WorldCom, or any of the hundreds of other businesses whose executives are serving jail time or paying enormous fines for their crimes? Martha isn't being prosecuted because she is a woman. She's being prosecuted because she took advantage of a situation in an illegal manner.

For anyone that isn't familiar with how the law works, I've recently completed my MBA coursework in this area and have at least a general understanding of what happened and why it is illegal. Insider trading is against the law. What is insider trading? If you are an insider to a business, meaning that you have access to records which have not been made public by the business, but are known to the business, and you make financial trades based off of that information in order to make a short term profit, you have broken the law. In this case, Martha Stewart was a stock holder in ImClone, a company that was hoping to market a new drug for treating cancer. During the FDA approval process for the drug, the FDA decided to hold the release of the drug. When the ImClone CEO learned of this, he left a message with his friend Martha to let her know. Obviously, the stock was going to lose a lot of value on this news. Rather than wait for the news to go public, both of these folks cashed out a large quantity of their stock before the price changed.

So who is the victim here? It is hard to say. Certainly Martha is not the victim, although some folks would like to paint her in that light. With securities fraud, it is difficult to pinpoint who the loser is. In this case, the victim is whoever bought the shares of ImClone that Martha was selling. Probably a mutual fund, or another investor. Fortunately, ImClone recently received approval for the use of their drug, and their stock price is higher than the price at which Martha sold her shares. Sort of ironic. Some folks dislike Martha. That's fine, but I don't need to hear about that either. The demonizing of Martha seems to be a hot topic on most networks as well. If they aren't depicting her as the victim of the good ole boy network, then they are depicting her as the bitch queen of the universe. I'm not sold on that idea either. Everyone can fall prey to making a bad decision from time to time. She's just human like everybody else.